JJB has secured crucial funding from Dick's Sporting Goods, America's biggest sportswear retailer, which has promised to pour up to £40m into the struggling British chain. In return Dick's could end up with a 61pc stake.

Within hours of the deal being signed, the chief executive of Sports Direct, Dave Forsey, issued a statement: "Dick's is well-known in America for selling guns. We just want to let them know that over here, they will fight by our rules. We have three weapons of our own, and the customer knows they are unbeatable: price, price and price ... Bring it on."

Insiders at JJB said they were baffled by his comments but that it gave a stark illustration about how JJB could differ itself from its larger, more successful rival. "They are a discounter. JJB wants to be an authentic sporting goods retailer," said one.

Mr Forsey would not give details about how much he intended to cut prices. "Nothing specific," he said.

The JJB rescue deal was struck after months of uncertainty and poor trading. Last year, it was forced to secure £96.5m in funds from major shareholders, which include Bill Gates's foundation, as well close 43 unprofitable stores. On Thursday, it reported a full-year pre-tax loss of £101m, with like-for-like sales down by 13.1pc.

It said that Dick's would not only fund a revamp of its stores, but also strengthen its relationships with major brands, such as Nike. Part of the rescue has also seen existing shareholders pump in an extra £10m and Adidas, the supplier, provide security for a two-stage loan of up to £15m.

David McCorquodale, at KPMG, who has been advising JJB said the company had no plans to start selling guns. "No, I don't think they'd go down very well in Wigan."